Big Ten Earns B1G Money

It all comes down to money. Purdue needs it. Ohio State and Michigan have it. Rutgers needs it so they joined the B1G. Yesterday was just another example of why Rutgers made the right decision by joining this conference. It was announced yesterday that ESPN will in fact stay in the B1G business by signing a new 6 year deal between the conference and the network. This comes as a bit of a surprise if you've paid attention to the business side of things. This is especially true when you consider ESPN's recent financial struggle. With fewer people having cable, ESPN has seen a drastic drop in revenue and their parent company, Disney, has forced them to cut budgets going forward. That's one reason you've seen some of the bigger named talent not be given new contracts at the company. Bill Simmons comes to mind immediately though there were other factors at play there.

With all of that hitting ESPN it was widely believed that they either would lowball the B1G and therefore not get the rights or wouldn't even compete for the rights in a serious fashion. It turns out ESPN initially did lowball the conference but big poppa Jim Delany wasn't having that and signed the initial deal with Fox instead. That Fox deal included 25 football games and 50 basketball games at the steep price of $240 million per year. The ESPN deal is slightly less money per year at just $190 million a year for 25 football games and 50 basketball games. The rumors report that the Fox deal is a bit pricier because it includes the chance for Fox to pick their games first and they also retain the rights to the B1G Football title game. I'm not sure that's worth $50 million a year extra but hey, I don't work in TV so I'll leave it to those folks in charge. Add to that the contract that CBS has with the conference in a basketball only capacity at $10 million per year and you can see the B1G has A LOT of money about to roll in. Let's take a look at some math shall we?

Fox deal - $240 million/yr

ESPN deal- $190 million/yr

CBS deal- $10 million/yr

Total- $440 million/yr

Per team - $31 million/yr (approximate and with no money going anywhere else which is unlikely)

Yeah. you read that right. For their television rights the B1G has $440 million coming in each and every year for at least the next six years. If you break that down between the 14 teams in the conference and divide it equally that leads to a $31 million/yr split. That number fails to take into account a number of factors. First, we don't know for sure if teams like Rutgers and Maryland are still getting equal splits of the revenue. Hell, I'm not even sure if Nebraska gets a full share yet. Regardless, this is a lot of money. In addition to this it doesn't take into account any other revenue distributions that I am unaware of. For instance, how is the split of that $440 million/yr impacted by any other BTN deals and any other deals with other companies that are out there in the world. The odds are very strong that this $31 million/yr per team is not accurate but it's still a very nice chunk of change.

The question here is what does Purdue do with this money? Well it's going to be a bump from the previous rights deals. If the Indy Star is to be believed, big grain of salt here, Purdue previously earned $27 million per year from the television deal. If that $31 million amount is correct that would amount to a $4/yr increase over the next six years for Purdue Athletics. That's $24 million additional cash flow over the life of this contract. If Purdue does in fact earn this additional income you have to think there's some good that can be done in the department with this. But then I remember this is Purdue, the most conservative athletic department out there. It's possible that they will simply squirrel this away and wait for a rainy day (it's been raining for roughly the last 7 years at Purdue). Could it be the push to do more football renovations? Could it be the money needed to finally add lights? Could it be the money needed to give the incoming AD the ability to let go of a failing coach rather than let the contract run until the buyout is able to be stomached? Who knows, but what I can tell you for certain is that Delany outdid himself in these negotiations. The guy is a machine. I have to think this might have been his last negotiation. He is getting up there in age and he may be ready to shuffle out the door on a high note.

So what do you think folks, what does Purdue do with this new found money? Throw your thoughts into the comments. In addition to what you think Purdue will do what do you think Purdue SHOULD do. Those can be two very different things as we have seen.